Nouriel Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said on Thursday that the worst of the turmoil had passed.
But Roubini emphasized the US would still need a second fiscal stimulus, possibly by the end of the year, as the unemployment rate quickly approaches 10 percent.
Developed economies are bottoming out or close to doing so, but the recovery will be anemic, with the US remaining in recession throughout the year, said Roubini, who is chairman of RGE Global Monitor.
PHOTO: REUTERS
“There is light at the end of the tunnel, there is a bottoming out of the US and of the global economy. And the light at the end of the tunnel for once is not an incoming train,” Roubini told investors at an event organized by the Chilean government in New York. “In many ways, the worst is behind us in terms of economic and financial conditions.”
During the event, Roubini said US labor markets would continue to deteriorate until the end of the year, forcing the government to deliver a second fiscal stimulus that could be in the range of US$200 billion to US$250 billion.
The economist expects US unemployment to top 10 percent by the end of the year, weighing on domestic consumption and the retail sector.
“I think we may need, in fact, a fiscal stimulus some time early next year or before the end of this year,” he told reporters after delivering a speech at the event.
“It might be in the US$200 [billion] to US$250 billion range — not too small, not too big,” he added.
Asked about the economic impact of a potential collapse of embattled US lender CIT Group, Roubini said the company should be allowed to go bankrupt if it is insolvent.
“I don’t think it can have systemic effects such as Lehman [Brothers],” he said, adding, however, that other institutions would need to step up to ensure credit continues to flow appropriately to small and medium-sized companies.
While developing economies in general will have a sub-par recovery during the next couple of years, emerging countries are in better shape to exit the recession faster, Roubini said.
After 10 years of sound macroeconomic policies and reduction in public debt levels, he said, many emerging economies were able to implement counter-cyclical policies for the first time, which will result in faster economic recovery.
“Today people are worrying more about sovereign risk in advanced economies than in emerging markets,” Roubini said, calling it a “shift in paradigm.”
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
WARNING: China should stop engaging in actions that undermine regional peace and stability, as it would only build resentment among people across the Strait, the CGA said China has deployed more than 100 navy, coast guard and other vessels in waters from the Yellow Sea to the South China Sea and the western Pacific since US President Donald Trump and Chinese President Xi Jinping (習近平) met in Beijing, National Security Council Secretary-General Joseph Wu (吳釗燮) said yesterday. “In this part of the world, #China is the one & only PROBLEM wrecking the #StatusQuo & threatening regional peace & stability,” Wu wrote on X. In a separate post, he said Beijing was coercing Taiwan’s maritime domain, calling it illegal and provocative, after the Coast Guard Administration (CGA) expelled a
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
More than 8,000 people took part in a rally in Taipei yesterday to express support for more defense spending, after the opposition slashed the Cabinet’s proposed NT$1.25 trillion (US$39.6 billion) special defense budget and capped it at NT$780 billion. The demonstrators urged the Cabinet to propose another bill. Taiwan Economic Democracy Union convener Lai Chung-chiang (賴中強) said the main problem of the passed budget plan is the removal of funding for critical items, not just that the total amount is smaller. Critical budget items included purchasing or developing uncrewed vehicles, Strong Bow (強弓) missile systems, additional ammunition, artificial intelligence-powered combat systems and Taiwan-US
RSS